Is Metro Bank Losing its Mojo?

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Metro bank has always
been a darling to many users. Since it was founded in the UK by Anthony Thomson
and Vernon Hill in 2010, the bank has been a real threat to the major and widely known banks.

Its new and fresh
energy welcomed many customers, and so
did the free dog biscuits that they
offered to people who showed up to any of the branches with their dogs. They
also had a branch based model which featured seven-day opening. This was a
gesture of loyalty and care for their customers, and it won many hearts.

However, it seems like
the charm was not meant to stay for long. Even though the bank will get a profit of £50
million for 2018, this is below the forecasted £59 million. The management of the bank publicly accepted this,
and they explained that it was because of
the soft fourth last quarter in 2018 that they experienced.

While
it experienced an increase in profits in the first three quarters of the
year, the last one had a decrease of 28%. The drop was attributed to by variation in customer behavior and continued
mortgage margin pressure. They also linked the low profits to the cost of
opening new branches. This is quite
valid because, in 2018, specifically in
the last quarter, they opened new branches in
Moorgate, Bath, Crawley, Ashford, Putney, and Piccadilly.

Russ
Mould, the bank’s investment director, further explained
that the mortgage market had had stiff competition and this is a major issue, and so is the increase in the savings
rate.

While
giving a statement, the bank’s investment director assured that with the many branches along the high streets which function
seven days a week, the bank will not have
a lot of problem getting back on its feet. He, however, mentioned that one
thing that may be a threat to Metro bank getting the intended profits is the
fact that the high competitiveness of the banking industry.

The
miss on the forecasted profit was an alarm and shone red light to investors as many started worrying about what
more to expect. Even the investment director’s statement
seems not to have been reassuring enough because the bank has begun
experiencing drops on its shares.

Immediately after the announcement, the bank’s shares fell by
30% at 1,548.44 pence. This, however, does not come as a huge shock since the
shares had been crumbling down throughout 2018.

Many are waiting to see if the bank will ultimately lose its
mojo or if it will get back on its feet, just as the officials have assured.